Zendesk investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Zendesk is a Software as a Service (“SaaS”) provider that helps clients better communicate with their customers through online customer chats and data analysis. Zendesk provides single customer service interface to organizations to manage their one-on-one customer interactions, track and predict common questions, and provide a seamless path to answers.
The Class Period commences on February 6, 2019. On February 5, 2019, after the close of trading, Zendesk announced its fourth quarter 2018 and full-year financial results for the period ended December 31, 2018. In addition to announcing fourth quarter 2018 “revenue [that had] increased 41% year over year to $172.2 million,” a fourth quarter 2018 “GAAP operating loss of $36.5 million,” that its full-year 2018 “revenue [had] increased 39% year over year to $598.7 million,” and a full-year 2018 “GAAP operating loss of $137.9 million,” the press release issued that day provided Zendesk’s first quarter 2019 and full-year financial guidance. Further, Zendesk published a Shareholder Letter and conducted a conference call with investors and stock analysts during which it provided additional positive commentary about Zendesk’s then-present business metrics and financial prospects.
According to the complaint, on July 30, 2019, after the close of trading, Zendesk issued a press release and conducted a conference call to announce its second quarter 2019 financial results. Zendesk’s net losses had grown to $54.5 million, or $0.50 per share, significantly larger than the $34.4 million, or $0.33 per share, reported in the second quarter 2018, despite the fact that its second quarter 2019 revenues had increased from $141.9 million in the second quarter 2018 to $194.6 million in the second quarter 2019. Following this news, the price of Zendesk common stock declined precipitously, falling nearly $10 per share, from its close of $93.12 per share on July 30, 2019 to close at $83.56 per share on July 31, 2019.
Then, on October 2, 2019, Zendesk disclosed in a blog post that it had experienced a data breach in 2016 involving 10,000 Support and Chat accounts that were activated prior to November 1, 2016. Zendesk stated that it had been alerted to the breach by a third party on September 24, 2019 and was using an outside team of forensic experts to validate claims of the third party and to determine exactly what data was accessed. Data exposed reportedly included: names, email addresses, and phone numbers of certain Zendesk end users. Following this news, the price of Zendesk common stock fell another $2.90 per share to close at $69.81 per share on October 2, 2019.
The complaint alleges that, throughout the Class Period, the defendants concealed material information and/or failed to disclose that: (a) Zendesk’s clients had been subject to data breaches dating back to 2016; (b) Zendesk was experiencing slowing demand for its SaaS offerings, particularly in Germany, the United Kingdom and Australia, due in large part to political uncertainty and China trade issues there; and (c) as a result of the foregoing, Zendesk’s business metrics and financial prospects were not as strong as the defendants had led the market to believe during the Class Period.
If you are a member of the class described above, you may no later than December 23, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Returning the attached form or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-844-887-9500 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
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Radnor, PA 19087
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